Friday, April 20, 2007

The Political Economy of "Greening" New York City Over the Next 30 Years

Mike Bloomberg is an unusual Republican. Most politicians do not have such a long run perspective. Perhaps he owns enough real estate in New York City that as a residual claimant he has the right incentives to enact policies that improve New York City's quality of life and this is capitalized into today's real estate prices?

I have always thought that city mayors should be paid with urban land (analogous to corporate "stock options") to encourage them to internalize the long run health of their city. Bloomberg already owns the land!

It will be interesting to see whether the "anti-green" interest groups can come up with any more powerful arguments than to say "no new taxes".

Here is the New York Times today;

April 20, 2007Bloomberg to Unveil Long-Term Vision for City By DIANE CARDWELL and CHARLES V. BAGLI

With New York’s population expected to grow by one million in two decades, Mayor Michael R. Bloomberg will call on Sunday for a raft of ambitious and sometimes contentious proposals that are intended to ease traffic congestion, reduce air pollution, build housing, improve mass transit and develop abandoned industrial land.

The speech, which mayoral aides have described as the centerpiece of his final 32 months in office, will outline his vision for the city over the next quarter century, setting priorities for refurbishing the city’s aging bridges, water mains, transit system, power plants and building codes. And in the talk on Sunday — Earth Day — the mayor will propose doing so in a way that reduces the strain on natural resources like water, clean air and land.

Toward that end, Mr. Bloomberg is expected to advocate more than 100 proposals, including charging drivers to enter the busiest sections of Manhattan, and using zoning and tax incentives to encourage the construction of 250,000 homes.

He also is expected to call for offering rebates and other enticements to make new and existing buildings more energy-efficient, and to ask for the creation of a public authority that would supplant the power that state government holds over many city operations, people briefed on the speech said.

He is also expected to propose spending $400 million to clean up polluted sites for new construction, to support the construction of another rail tunnel under the Hudson River to Midtown at a cost of $7.5 billion, and to create new zoning and tax breaks to increase the supply of housing in the hope of making the overall market more affordable.

No one has ever accused the Bloomberg administration of not thinking big; trying to win approval to build one of the world’s most expensive football stadiums on the West Side of Manhattan was just one example. But getting big results has often proved elusive. And there is little doubt that much of the mayor’s package of proposals will face stiff opposition from local politicians as well as from the state legislators who will decide whether to approve many aspects of it.

Policy experts said the mayor’s agenda, known as PlaNYC, is perhaps his most far-reaching and its fate could determine whether his administration will be remembered as truly transformative.

“This is their best opportunity to stamp this city with the administration’s imprint for decades to come,” said David S. Birdsell, dean of the Baruch School of Public Affairs. The plan was developed by a team of experts working under Daniel L. Doctoroff, the deputy mayor for economic development and rebuilding.

Administration officials have worked hard to keep the plan under wraps and have declined to comment on any of its details, cautioning that they are not final. But a picture has emerged from interviews with several government officials, business leaders and advocates who have been briefed on it, none of whom would allow their names to be used because Bloomberg officials had sworn them to secrecy.

One of the most significant proposals calls for creating an authority that would raise money and identify strategic infrastructure investments. The city currently has little say over the agencies, like the Metropolitan Transportation Authority, the Empire State Development Corporation or the State Department of Transportation, that control large-scale projects.

The new authority would be composed of city and state appointees, giving the city greater control, although the governor would have some veto authority.

What will almost certainly be the most contentious idea, however, involves charging drivers to enter the busiest sections of Manhattan. The proposal being formulated calls for money raised from congestion pricing, which could reach hundreds of millions of dollars a year, to go into a fund for large-scale transportation investments. Those would include projects for the boroughs outside Manhattan, where drivers would be most affected by new fees that could reach $8, minus a credit for any tolls already in effect.

The scope of Mr. Bloomberg’s plan is fraught with economic and political obstacles that may make the Earth Day address more the beginning of a long and complex negotiation than an immediate spur to action.

Opposition has already formed to congestion pricing, which Mr. Bloomberg himself has resisted in recent years. Walter McCaffrey, a lobbyist representing Keep NYC Congestion Tax Free, which is made up of garage owners, the Queens Chamber of Commerce and some labor and neighborhood advocates, says the city should look at other methods of dealing with congestion before resorting to such a “draconian” method.

“This is another tax for New York City folks,” Mr. McCaffrey said. “If you’re riding in a limo you can afford it. But this city is also made up of working-class people who would be hurt by it.”

The package of proposals is sure to cost tens of billions of dollars and require state legislation and the cooperation from the very people and institutions that may be threatened by the changes: the City Council, the Port Authority of New York and New Jersey, the governor and the State Legislature. The notion of even proposing a plan for congestion pricing, for instance, is so politically toxic that some Bloomberg officials refer to it as “the program that shall not be named” for fear that the mayor himself will in the end decide to withdraw support for the idea.

City officials seem mindful that their failure to win allies among legislators and civic groups helped in 2005 to scuttle plans to build a football stadium for the Jets on the West Side. That defeat in turn ended the city’s Olympic bid, which had brought with it a grand development agenda for the city, some of which then lost momentum.

This time, back with an agenda that in some ways resembles the Olympic plan in a green dress, officials are trying a different approach, working to engage the public and build good will for their ideas. Officials created an advisory council that included environmentalists, business groups, labor leaders and planning advocates like the Regional Plan Association; many of them opposed the stadium, but now say they are happy with the way the new package of proposals has developed.

Over the past three months, officials from the city’s Office of Long-Term Planning and Sustainability have played host to meetings with environmentalists, energy and planning experts, scientists, academics, business leaders and ordinary citizens to solicit ideas. They created a Web site that got more than 50,000 hits and resulted in 3,000 ideas, including proposals to add more incentives for so-called green roofs and to ban cars in Manhattan.

Aware of how high-stakes and controversial some of the proposals are, the administration has urged the Partnership for New York City, a business group that has pushed for a congestion pricing plan, and others to raise money for an ad campaign, which they are planning to start the day after Mr. Bloomberg’s speech.

“We’ve been summoned to be at City Hall at 10:30 Monday to say nice things about this whole effort,” said one real estate industry executive who is supportive of the mayor’s initiative.

Bloomberg officials have also been networking behind the scenes, beginning to share the plan with government officials and legislators over the last several days.

In some ways, the political moment is ripe for many of the proposals, as the leaders of the city, New York State and New Jersey — Mr. Bloomberg, Gov. Eliot Spitzer and Gov. Jon S. Corzine (now recovering from a near-fatal traffic accident) — are all wealthy, strong-willed men who are not so beholden to the traditional political apparatus.

But as Mr. Bloomberg is only too well aware from the clock on his office wall that counts down the remaining time in his term, he has only 986 days left to pursue his policy ambitions.

As Mr. Bloomberg put it in a speech on the subject in December, he began feeling that urgency as he saw the scale of the city’s needs.

“Unless we considered the full range of challenges to our city’s physical environment, the progress we’d worked so long and so hard for might be at risk,” he said. “And it became clear that to secure a stronger, cleaner, and healthier city for our children and grandchildren, we had to start acting now.”